Diamond exports could top P22 billion in 2010

MBONGENI MGUNI
Staff Writer | Thursday October 28, 2010 00:00

Yesterday, Capital Securities researchers said the value of diamond exports up to August 2010 were 72 percent of the 2008 total, which is used as a baseline instead of 2009 whose statistics were warped by the recession.

At current trends, Capital Securities expects this year's exports to eclipse the P20.7 billion for 2008. 'Our unofficial forecast that diamond exports will top those of 2008 by at least 7.5 percent is more than supported by industry forecasts of a 10 percent increase,' one researcher said.

'This would firmly re-position diamond revenues as the backbone of the Botswana economy with a contribution of 70 percent of all export revenues, close to the traditional highs which translated into 35 percent of Gross Domestic Product and 50 to 60 percent of government revenues.'

Capital Securities' projections point to the solid recovery of rough diamond prices globally, as the P20.7 billion earned in 2008 was from 32.6 million carats produced at Debswana's mines. This year, the diamond giant expects to produce about 23 million carats, up from the initial target of 20 million.

The researchers said while the higher projections for diamond exports would reduce the non-mining share in contribution to the economy, this would still be five percent higher than 2008 'with the non-mining private sector close behind'.

'Comparisons of growth forecasts for 2010 against 2008 - skipping the lost year of 2009 - are at the moment positive, not only in the short-term but in the continuing pursuit of sustainable long-term growth.'

Capital Securities analysts expect the non-mining sectors of the economy to grow this year, contributing 70.2 percent to GDP. Apart from manufacturing, which is expected to decline, the analysts expect sectors such as construction, agriculture, banking, insurance, business services and hospitality to show growth this year.